A western wood product has two production departments: cutting and assembly. The company has been using a single predetermined cost driver rate based on plant wide direct labor hours. That, is the plant wide cost driver rate is computed by dividing plant wide support costs by total plant wide direct labor hours. The estimates for support costs and quantities of cost drivers for 2006 follow:

a. What was the single plant wide cost driver rate for 2006?
b. Determined departmental cost driver rates based on direct labor hours. For assembly and machine hours for cutting
c. Provide reasons why western wood might use the method in (a) or (b)

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Manufacturing supp Direct labor hours Machine hours Cutting S25,000 1.000 4,000 Assembly S 35,000 3,000 2,000 Total 60,000 4,000 6.000 ort